The December GTA portfolio acquisition
Its latest acquisition involves a 1.5-million-square-foot portfolio in the Brampton, Mississauga and Western Greater Toronto Area.
Although he declined to provide specific details because of confidentiality requirements, Owen did say the portfolio provided Pure with a property class which is very tough to come by in the GTA.
“It’s actually primarily the quality of the portfolio, the unique aspects of it, where it’s located and the density within the portfolio,” he said when asked why it was of interest to Pure.
“We have a fairly significant presence in the Brampton, Mississauga, GTA West corridor, (but) these properties in particular feature low site coverage (and) excess trailer parking which we’ve seen extremely high demand for. Additionally, (there is) a lack of new buildings that are anything like it.”
He said most developers are currently building with maximum site coverage to earn higher development profits based on building square footages, so there are very few new properties available with extensive truck/trailer parking and storage.
Municipalities also are not granting as many approvals for these types of properties – especially in prime employment zones.
There is, however, demand for these facilities.
“We’ve seen the opposite take place from a tenant demand perspective – there is a lot of tenant demand in this specific build,” he explained. “I think that’s a function of a couple of things, one on-shoring, and having more local capacity as opposed to the just-in-time.
“Being able to store containers for excess demand is something a lot of our customers are starting to do locally. I think that is going to be a trend for the foreseeable future especially coming out of COVID and the disaster the supply chain went through and the inflation it caused as a result.
“The bottom line is the more land you have to store, whether it’s trailer or outside storage of goods . . . having that capability is, I would say, very unique in the GTA.”
Major developments for Ajax, Brampton, Hamilton
Unlike some industrial owners which want to focus on one class or type of facility, Pure wants to be involved in the entire spectrum.
“If you want to consolidate with us, let us know. We have large-bay facilities for you, we have small-bay facilities if you need last-mile and then we have your standard mid-bay, kind of a hub-and-spoke model,” he explained.
“We own a diverse set of buildings, small-, medium- and large-bay and within that thousands of units which are completely differentiated from one another. What we want to offer to our customers is really that experience, that model that they can come and talk to us for any size.”
That means continuing to expand both through future acquisitions and through development. On that front, among several major projects Pure has just brought to market is the 1.2-million-square-foot Lakeside Logistics Centre to be constructed along Kingston Road in Ajax, just east of Toronto.
Pure is at the approvals stage for the project, which if not the biggest, is certainly one of the biggest industrial buildings currently on planning boards in Canada.
Although some sectors of the economy might be slowing due to higher interest rates, inflation and other factors, Owen said the industrial metrics remain very strong.
“Look at all the new developments that went up and how quickly they keep being absorbed in the GTA. I keep seeing leased, leased, leased.
“I think that’s a function of the fact a lot of these businesses are making long-term decisions: ‘This is where I need to be, this is where I want to be and this is a class-A facility. Let’s take it now before we regret not taking it.’ ”
Especially in the GTA, there is still also demand for large state-of-the-art facilities. Most new product coming to market is pre-leased, which means it doesn’t impact the critically low sub-one per cent vacancy rate. Lakeridge is scheduled for delivery in Q4 2024.
“That’s probably going to be similar to Kingston Road. This is a state-of-the-art, 40-foot clear facility with excellent design . . . we are also going to try to make it as ESG-friendly as possible.”
Pure also has a couple of other major projects at various stages of development including a 630,000-square-foot, two-building site under construction in Brampton in partnership with Hopewell Development. That is slated for summer delivery, with buildings of 458,496 and 167,909 square feet, respectively.
Further out in the planning process is land adjacent to the Hamilton airport, known as Upper James Landing, which could accommodate over a million square feet of industrial development and 40-foot clear heights.
Currently in the planning stage, Pure is marketing several potential configurations for the site, including one-tenant and multi-tenant options.
Source Renx.ca. Click here to read a full story
